Moody’s reviews Hengdeli

Moody's Investors Service said it placed Hengdeli Holdings Ltd.’s Ba2 corporate family rating and the Ba2 rating of its senior unsecured bonds under review for downgrade.

The action follows Hengdeli's Feb. 17 announcement that its 2015 net profit will decline roughly 70% from 2014.

"Hengdeli's profit warning indicates a magnitude of deterioration which is beyond our expectations," Moody's vice president and senior credit officer Lina Choi said in a news release.

Hengdeli had originally reported RMB 283.7 million in net profit for the first half of 2015, and therefore a full-year net profit decline of 70% implies a second half net loss of around RMB 109 million.

Moody's expects the weak performance of Hengdeli in the second half of 2015 will likely continue because China's slowing economy and weak consumer spending are unlikely to change in the next 12 to 18 months.

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